NAR Urges High Court to Halt Pre-emption

The National Association of Realtors is urging the U.S. Supreme Court to stop the Office of the Comptroller of the Currency from blocking the states from regulating the mortgage subsidiaries of national banks.The comptroller's actions are "unlawful" because they pre-empt state authorities from regulating operating subsidiaries that are incorporated under state law, the NAR says in a brief filed with the Supreme Court. The high court is slated to hear arguments this fall in a case (Watters v. Wachovia Bank) in which the Michigan banking commissioner Linda Watters has been blocked by federal courts from regulating and examining Wachovia Mortgage Corp., which operates in Michigan as a subsidiary of Wachovia Bank NA, Charlotte, N.C. The OCC contends that operating subsidiaries can engage in the same activities as the parent national bank and are exempt from state licensing and consumer protection regulations. But the Realtors argue that the OCC has "overstepped its boundaries" to give national banks a competitive advantage over state-licensed lenders. The NAR has been lobbying Congress for several years to keep national banks from entering the real estate brokerage business.